Is Behavioral Economics the Past or the Future?

http://orderstatistic.wordpress.com/2014/02/28/is-behavioral-economics-the-past-or-the-future/

by mindcrime • 12 years ago

36 9 12 years ago

orderstatistic.wordpress.com

gmac• 12 years ago

I teach a Behavioural Economics (BE) module of an Economics Bachelors degree. BE is not awfully radical: it tends to build on and refine standard theory. If BE is 'the past' I suspect it's only because its key parts have been absorbed into the mainstream — leaving us without a sub-discipline, but with a general Economics that's rather more Behavioural than before.

kartman3• 12 years ago

I think this recent thread is very relevant for any posting about Economics research: https://news.ycombinator.com/item?id=8543865. TLDR: Overall, the credibility of the economics research literature is likely to be modest or even low.

i would think we will save huge amounts of money and world pain, by not funding this pseudo science similar to homoeopathy.

btw, Kahneman who did the foundational research in what economists hijacked as behavioral economics is not even remotely an economist.

kartman3• 12 years ago

edit: "not even remotely an economist" I mean as a compliment, I read his Prospect Theory papers and hold him in high regard. He is a great scientist and psychologist, who did not ever study what is called economic theory- so not an economist.

aet• 12 years ago

He won the Nobel Prize in Economics

kriro• 12 years ago

I think a rigorously executed BE has merits. There needs to be a mindset shift that repeating experiments is not "lame" but rather important though (also true for psychology) and the experiments need to be set up better by and large.

The "pop-BE" books are also nicely written and fun to read (Ariely etc.) which helps the discipline from a Fleckian science theory point of view in my opinion.

Reading through some of the famous papers and most of the pop books also gave me some inspiration for A/B-tests to run and made me more aware of interesting ethical issues. The "default" label option mentioned in the post is a good example of that. Before reading up on BE I somewhat naively assumed that websites aren't optimized for things like that :)

However for the most part I agree that the most interesting ideas will be absorbed into the mainstream. For some reason the mainstream in economics is rather misunderstood by non economists. I had a pretty twisted view of what it was before I started sampling some up to date papers and getting a better idea (I'm not an economist)

gimpei78• 12 years ago

Economist here. Not quite sure what he's talking about as there are a ton of Behavioral Economists around and growing. Since he is a Macroeconomist I imagine he is expressing "surprise" that there aren't really any Macroeconomists that are Behavioral Economists. This isn't so surprising when you realize that the insights from Behavioral Economics undermine the basic approach to Macro since the seventies. The reason there aren't any behavioral Macroeconomists is that the old guard won't let them in, because it would involve throwing all their ideas where they belong, the trash. This sort of delusional thinking is what you would expect from someone who believes you can take one highly unrealistic model of an individual, multiply it by a million and call that the "microfoundations" of an economy.

logicalman• 12 years ago

Here here. If anything, behavioral economics is becoming more legitimized with the advent of neuroeconomics.

shalmanese• 12 years ago

The problem with BE in the Kuhnian sense is that it's still pre-paradigmatic. BE is great at lobbing bombs at rationalist economics and pointing out all the flaws but it's yet to offer a compelling, coherent framework for which positive results can be derived.

Kuhn states in the Structure of Scientific Revolutions that paradigm shifts do not occur simply when people are aware of how broken the old system, so no amount of poking holes will cause the BE revolution. Instead, BE needs to offer an alternative paradigm which useful work can be done.

Is Behavioral Economics the Past or the Future?

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